How will the shutdown affect feds’ benefits? 4 things to consider

With no deal in sight, the government shutdown continues rolling on and thousands of furloughed federal employees remain at home without pay.

Feds are clearly growing frustrated, with many taking to social media to vent their frustrations. (Click here to read some of the feedback we’re getting).

But many feds are also confused and concerned about how the shutdown — especially if it’s prolonged — will affect their benefits.

Federal News Radio dug through guidance provided by the Office of Personnel Management and other agencies and consulted with the experts to bring you some of the answers to the most-asked questions.

1

How will the shutdown affect my FEHBP coverage?

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We’ve received some emails from furloughed feds who fear they’ll lose their health-care coverage under the Federal Employees Health Benefits Program because the’ve been placed in nonpay status.

Don’t worry. In its shutdown guidance, OPM is uequivocal on this front: You won’t lose coverage.

Furloughed employees’ FEHBP coverage will continue through the shutdown, even if the employee’s agency isn’t able to make premium payments on time due to the shutdown’s cash crunch, according to OPM.

Employees’ share of their premiums will accumulate while they’re in nonpay status and will eventually be withheld from pay when the shutdown lifts and they go back to being paid normally, OPM stated.

You may have heard that if a furlough lasts for more than 30 days, it’s treated like a reduction-in-force, or layoff. That’s generally true, but not in the case of a shutdown due to a lapse in congressional appropriations. If the shutdown were to go beyond 30 days, agencies would simply re-issue furlough notices to employees and treat it as a second furlough.

You should also know that during the shutdown, employees in nonpay status — which includes both furloughed employees as well as “excepted” employees who are still working — are unable to terminate their FEHBP coverage.

The federal benefits Open Season, where employees are free to make changes to their insurance coverage — doesn’t begin until Nov. 11. However, if the shutdown lasts that long — and that’s a big if — some measures could be affected.

For example, it would be up to each agency to determine if employees responsible for processing Open Season enrollment requests would be furloughed, which could cause delays for some employees in signing up for the program.

However, that’s not necessarily an immediate concern. For Open Season enrollment to be affected, the shutdown would have to be the longest ever in U.S. history, lasting twice as long as the 21-day shutdown in the mid-1990s.

2

What happens to my TSP account?

The Thrift Savings Plan will continue normal operations during the shutdown. The Federal Thrift Investment Board, which manages employees’ 401(k)-style retirement accounts is funded through participant fees, not appropriations, so its workforce is exempt from furloughs.

However, because employees aren’t getting paid, their TSP contributions will stop and employees under the Federal Employees Retirement System will not receive their agency’s matching contribution, according to guidance from the board. (The guidance is dated March 2011, however the TSP recently reposted the material on its website).

Participants are still eligible to take a loan against their TSP while being furloughed during a shutdown. Normally, the agency bars employees in nonpay status from taking out loans. But because shutdowns are “rare occurrences and are typically of short duration,” the board has determined that a break in pay due to a shutdown won’t impact eligibility.

Also, outstanding loan payments will be put on hiatus, since they are deducted from employees’ pay.

3

The Office of Personnel Management’s Retirement Services division is exempt from furloughs because it’s funded by a special retirement trust fund, not through annual appropriations.

Employees who recently retired from federal also shouldn’t see delays in receiving interim annuity payments during the shutdown — as long as OPM has received the retirement application, according to OPM guidance.

If your agency or payroll office didn’t submit the application before the shutdown began, however, then your interim annuity could be delayed. That’s because OPM typically has to gather work-history files from a number of agencies to compile a complete record of service. Some of those agencies may have reduced operations and staff members because of the shutdown, which could cause some delays.

4

What about TRICARE and VA benefits

Military members and their families who receive health care from military facilities and clinics should expect delays and reduced hours during the shutdown, according to a notice posted Oct. 1 by the Defense Health Agency. TRICARE beneficiaries who receive care from private-sector facilities should see little impact.

TRICARE recipients with specific questions should contact their regional health contractor. You can find a list here.

For its part, the Veterans Affairs Department says all VA medical facilities and clinics will remain open and operational, according to a VA fact sheet.

The agency says it will be able to continue processing claims for compensation, pension and educational programs. “However, in the event of a prolonged shutdown, claims processing and payments in these programs would be suspended when available funding is exhausted,” the fact sheet states.

More immediately, veterans could begin to see delays in processing disability processing. The Veterans Benefit Administration says it’s unable to continue overtime for claims processors. The use of mandatory overtime has been a key driver in reducing a longstanding backlog of VA disability claims.